Family Leadership Strategies

16 some may question their desire to join the enterprise, choosing to pursue other interests. Families should not make any assumptions but be alert to the emotional reactions of upcoming leaders. Often, the next generation will express concerns over whether they will have the required level of autonomy to lead as they see fit. Many will have specific ideas and strategies in mind to transform family business, investments, or holdings, and such ideas may run counter to past practices. They also question how much guidance they might need from a senior, and whether it can be provided in a way that would not undermine their autonomy. Most, if not all successors, will want to know with certainty that they have the support of their family. In brief, successors, much like a new CEO, board member, or leader of any enterprise, want and need to feel they can take on the role with the full support of the family and shareholders, are able to call upon others as needed, and are subject to realistic expectations. A sensitive but key imperative for successors is fair equity ownership and compensation. Family leaders should be afforded the same equity — stock grants and options — and compensation as a well-qualified external candidate but no more. In general, we tend to see families under-compensate rather than over-compensate new family leaders. This can create unnecessary friction and turmoil. Families are well advised to work with legal and compensation advisors, who can tailor compensation and equity ownership plans to the unique needs and circumstances of the family. Adding objectivity to the process invariably benefits all parties. It is also crucial that there is fairness in the succession process, so that all siblings and cousins have the opportunity to assume a leadership role in the enterprise or family. Successful families adopt a meritocratic approach. Why? Increasing the potential number of candidates invariably results in the selection of the most qualified family member (or non-family member). It is essential that seniors take the lead in: • Fully setting out the guidelines, values, selection process rules, and principles early on so as to create a level playing field from the start